Bitcoin news

BIP-110 is a proposed one-year change that limits non-financial data on Bitcoin and has sparked a debate over how Bitcoin's block space should be used.

Bitcoin Improvement Proposal 110 entered its mandatory-signaling phase at block 961,632 on Saturday, with only 2.53% of miners signaling support, far below the 55% threshold for early activation. Nodes enforcing BIP-110 began rejecting blocks without version bit 4, creating a minority branch that quickly fell behind the dominant chain, making a sustained rival chain unlikely without greater miner participation. The proposal, written by pseudonymous developer Dathon Ohm, seeks temporary one-year restrictions on data-heavy transactions, including limits on output script sizes, OP_RETURN outputs, and certain Taproot features, to reduce storage and bandwidth costs for node operators. Critics like Michael Saylor and Adam Back argue it could divide Bitcoin and cause nodes to reject currently valid transactions. Proponents have also discussed a contingency proof-of-work change if miners remain opposed.

Block, the fintech firm led by Jack Dorsey, acquired 234 Bitcoin in the first half of 2026, increasing its total holdings to 9,117 BTC as of June 30. However, a drop in Bitcoin's price reduced the value of these holdings to about $534 million, down from roughly $777 million at the end of 2025, leading to over $260 million in investment losses during the period. The update came with Block's second-quarter earnings, which beat expectations. Adjusted EPS rose 64.5% year-over-year to $1.02, surpassing the consensus estimate of 86 cents, while revenue grew 9.3% to $6.6 billion and gross profit increased 24.8% to approximately $3.2 billion. Growth was driven by strong performance in Cash App and Square, offsetting a nearly 13% decline in Bitcoin Ecosystem revenue.

Bitcoin hit block 961,632, beginning the mandatory signaling period for BIP-110, a proposal to temporarily curb non-financial data on the network. Miner support has seldom exceeded 2.5%, far below the 55% threshold, and prominent figures like Michael Saylor and Adam Back oppose it. Supporters are pushing BIP-110 as a user-activated soft fork (UASF), relying on node operators to reject non-signaling blocks, citing the 2017 SegWit activation as precedent. This could split the network into two competing chains. The signaling window lasts until block 965,664, expected in about four weeks.

A volunteer security initiative, called the Bitcoin Red Team, has used frontier AI models to scan approximately 150 Bitcoin repositories, uncovering over a dozen critical vulnerabilities across wallets, cryptographic libraries, and infrastructure. The team, led by AnchorWatch CEO Rob Hamilton, has spent about $20,000 on AI services. The initiative uses models from OpenAI, Anthropic, and Z.ai to identify exploits and generate documentation. Developers report averaging roughly one critical exploit per hour per person, with costs reaching $10,000 daily. Specific affected projects and vulnerability details were not disclosed. This effort highlights AI's growing role in crypto security, following similar discoveries in Zcash and attacks on Coldcard and Boltz.

Bloomberg analyst Eric Balchunas tied the run to the Coldcard wallet exploit, noting several Bitcoin funds have drawn inflows daily since the hack.

BTCPay Server, a self-hosted Bitcoin payment processor, has confirmed that attackers exploited a critical vulnerability to steal funds from users running versions prior to 2.4.2. The flaw allowed unauthenticated remote attackers to obtain LND credential files, potentially granting full control of Lightning Network nodes and access to funds. The project has urged all operators to update immediately, with LND users specifically advised to upgrade to version 2.4.2 and LND 0.21.1, which automatically regenerates credentials. Those unable to patch were told to take servers offline. The incident follows another major security breach: Galaxy Research confirmed that 1,719 Bitcoin, worth about $111 million, has been stolen from Coldcard users, with estimated losses expected to exceed $130 million. Neither attack targeted the Bitcoin protocol itself, but rather exposed weaknesses in surrounding tools.

Strategy Inc., formerly MicroStrategy, has raised approximately $15 billion through AI-designed hybrid securities to fund its Bitcoin purchases. CEO Michael Saylor revealed on a podcast that ChatGPT helped create the new instruments after the company hit limits with traditional convertible bonds, resulting in the STRK preferred stock and the variable-dividend STRC. The company has deployed the capital into Bitcoin, bringing its holdings to 843,738 BTC as of late May 2026. While the AI-generated structures passed standard regulatory review, the approach raises concerns about concentration risk, as Strategy's corporate identity now relies heavily on a single asset, potentially straining its obligations during a prolonged downturn.

A critical vulnerability in BTCPay Server, an open-source Bitcoin payment processor, allowed attackers to drain funds from connected Lightning nodes. The flaw involved persistent macaroons, API-key-like credentials that remained valid after software updates, requiring a manual refresh. Hardware wallet maker Foundation and Citadel21 publisher hodlonaut were among the first confirmed victims, with their Lightning channels force-closed and funds swept clean. BTCPay Server released version 2.4.2 and an NBXplorer update on August 7, urging operators to upgrade immediately or shut down servers. The exploit is separate from a prior authentication bug patched days earlier. Technical analyses are expected soon, as the incident raises concerns about security review pace amid ongoing audits of Bitcoin infrastructure.

Attackers exploited a critical vulnerability in BTCPay Server to drain Lightning nodes running LND, prompting urgent calls to update to version 2.4.2 or take servers offline. The flaw allowed unauthenticated access to LND credential files, enabling fund theft. Victims include hardware-wallet maker Foundation and bitcoin publication Citadel21, whose Lightning nodes were swept. BTCPay's standard on-chain wallets were not affected, but funds in LND's on-chain wallet remain at risk. A full postmortem is expected soon.